Management representation letter: example

[Date - same as date of audit opinion]

[Addressed to audit firm]

We confirm that the following representations either made to you or implied by us during the course of the audit are, to the best of our knowledge and belief, accurate.

1. The financial statements, including the notes attached to and forming part of the financial statements, have been prepared so as to present fairly the state of affairs of [insert name of entity] as at [insert balance date] and the results of operations [and, where appropriate, cash flows] for the 12 month period ended on that date in accordance with [insert name of relevant statute and/or accounting standards].
2. The financial statements have been based solely on the accounting policies and assumptions referred to in the notes, including the assumption that [insert name of entity] is a going concern and is in a position to pay all its debts as and when they fall due.
3. Management (a) is responsible for the preparation and presentation of the financial statements; (b) is responsibile for the design, implementation and maintenance of internal control to prevent and detect fraud; (c) has disclosed to the auditor the results of its assessment of the risk that the financial statements may be materially misstated as a result of fraud; (d) has disclosed to the auditor its knowledge of fraud or suspected fraud affecting the entity involving: (i) Management; (ii) Employees who have significant roles in internal control; or (iii) Others where the fraud could have a material effect on the financial statements; and
4. No events, other than those referred to below, have occurred since balance date that are (i) likely to throw further light on conditions that existed at balance date, or (ii) otherwise required by [insert name of relevant statute and/or accounting standard] to be disclosed in the financial statements.
   • [insert relevant events here]
5. [insert name of entity] has proper title to all assets included in the financial statements, and details of assets that have been given as security or are otherwise encumbered are disclosed in the financial statements.
6. All material liabilities, both actual and contingent, including guarantees, are disclosed in the financial statements.
7. Provisions, deferred income and deferred expenditure included in the balance sheet have been estimated in accordance with the polices and assumptions referred to in the notes to the financial statements.
8. There are no entities, besides those referred to below, that could be considered "related parties" as defined in [insert name of appropriate statute and/or accounting standard].
   • [insert name of related parties here]
9. Other than as stated below, no decisions have been made, and no actions have been taken or are contemplated, that may materially alter the value or classification of assets and liabilities recorded in the financial statements.
   • [insert details of decisions/actions here]
10. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
11. Other than as stated below, we have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators or others.
• [insert details of such knowledge here]
12. We have made available to you all the information necessary for you to form your opinion on the fairness of presentation of the financial statements and are not aware of any such information that has been withheld from you. All transactions have been recorded and are reflected in the financial statements.

_____________________________
(Chief Executive Officer)
_____________________________
(Chief Financial Officer)